Hewlett-Packard (HPQ)

The Company has
significant international sales and purchase transactions in foreign
currencies. The Company enters into foreign currency forward contracts and may
enter into currency options with durations of generally less than 30 days to
hedge such transactions. These derivative instruments are employed to eliminate
or minimize certain foreign currency exposures that can be confidently
identified and quantified. Generally, these instruments are not designated as
hedges for accounting purposes, and changes in the fair value of these
instruments are recognized immediately in other income (expense). The Companys
currency hedging activities are focused on exchange rate movements, primarily
in Canada, Mexico, the United Kingdom, Western European countries that use the
euro as a common currency, Australia, India, Israel and Switzerland. At December 31,
2007 and 2006, the Company had forward exchange contracts to purchase various
foreign currencies in the amount of $2.6 billion and $1.9 billion,
respectively, and to sell various foreign currencies in the amount of $0.9
billion and $1.0 billion, respectively.